Is the ecological footprint related to the Kuznets curve a real process or rationalizing the ecological consequences of the affluence? Evidence from PSTR approach

Abstract

The aim of this paper is to empirically investigate the nonlinear effects of economic growth on ecological footprints as an indicator of environmental degradation. The sample consists of 26 European Union (EU) countries by covering the 1990-2013 period. We employ the recently developed panel smooth transition regression (PSTR) model, which can predict the threshold level endogenously. These ecological footprints are divided into those occurring on six major categories of ecologically productive areas, including cropland, grazing land, forest area, fishing grounds, built-up land, and carbon-absorption land. The empirical results indicate that environmental pressure tends to increase with economic development, but then does not decline with further growth for all the ecological footprints except the fishing grounds footprint (FGF). The empirical findings imply that the EKC hypothesis is a problematic phenomenon, at least in the case of the accumulation of stocks of waste, since the relationship between ecological footprint types (excluding the FGF) and economic development does not exhibit the inverted U-shaped pattern associated with the EKC hypothesis.